In a Washington Post op-ed this morning, Harvard economist and McCain adviser, Martin Feldstein, called for the Big Three automakers to enter bankruptcy to rewrite excessive union contracts. President-elect Obama and Congressional Democrats seem set on providing loans with conditions to restore long-run financial viability similar to the bill hammered out by House Financial Services Chair Barnery Frank yesterday. Although the House is expected to pass it later this week, I doubt it will get through the Senate because of Republican opposition. Next year, something like it is very likely to be enacted.
Capital Gains and Games
Washington, Wall Street & Everything in Between
Edmund L. Andrews
Bruce Bartlett
Stan Collender
Pete Davis
Andrew Samwick
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Into a great depression
It may have been OK to let the Automakers go into Chapter 11 when the health of the country is not where its at now. If this were a few years ago, go ahead. The entire economy is collapsing with home values going down, stocks going down, durable values going down, basically all assets are sinking. Its just not the right time to let them fail cause it we will definitely cause us to be in a bigger hole than now. Some economist he is. He has to look at all the indices. Everything is sinking faster than we can imagine.
If this were Japan or China, I'm quite sure their governments will bailout their biggest industries.
Say "no" to "zombie companies"
"If this were Japan or China, I'm quite sure their governments will bailout their biggest industries."
Yes, this is precisely what happened after the Japanese real estate meltdown. They did bail out many failing industries, the "zombie companies" which lead to the zero-growth "lost decade".
The airline industry consolidated, the financial industry consolidated, now it is time for the auto industry. Perhaps some of our loser US auto companies can be purchased by companies that "get it" like Toyota.
Last time we listened...
To Barney Frank, was when he was telling us there were no problems with Freddie and Fannie. How'd that work out?